nework (L08-1, 8-2, 8-3·8-50 Help Saved 4 On January 1, Year 1, Prairie Enterpri

Question

nework (L08-1, 8-2, 8-3·8-50 Help Saved 4 On January 1, Year 1, Prairie Enterprises purchased a parcel of land for $28,000 cash. At the time of purchase, the company planned to use the land for a warehouse site. In Year 3, Prairie Enterprises changed its plans and sold the land. Required a. Assume that the land was sold for $29,500 in Year 3. ints (1) Show the effect of the sale on the accounting equation (2) What amount would Prairie report on the Year 3 income statement related to the sale of the land? (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land? eBook Hint Print b. Assume that the land was sold for $24,000 in Year 3 (1) Show the effect of the sale on the accounting equation (2) What amount would Prairie report on the Year 3 income stotement related to the sale of the land? (3) What amount would Prairie report on the Year 3 statement of cash flows related to the sale of the land? es Complete this question by entering your answers in the tabs below.

Explanation / Answer

a1) Accounting equation :

a2)

b1) Accounting equation :

b2)

PRAIRIE ENTERPRISES Accounting equation, year 3 Assets = Stockholder's equity Cash Land = Common Stock + Retained earnings 29500 -28000 = 0 + 1500

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